Q: What state power’s may be taken over by the federal government for exercise by itself or for delegation to their legislative nominees, such as Australian local governments? Answer: All.
Before the WorkChoices case, the answer to that question was ‘doubtful’ or ‘problematic’. An academic held the view that existing, federal direct funding programs to local government such as ‘Roads to Recovery’ may, if challenged, be held to be unconstitutional. Such doubts should now have evaporated. The High Court has given a clear answer. That is, Australian government legislative powers are unlimited in Australia. They have carte blanche to make laws.
Here is an extract from Justice Kirby's minority judgement on the implications of the (unsuccessful) challenge by states and territories to the Government's controversial workplace relations laws, ‘WorkChoices’. Justice Kirby wrote:
‘539 The States, correctly in my view, pointed to the potential of the Commonwealth's argument, if upheld, radically to reduce the application of State laws in many fields that, for more than a century, have been the subject of the States' principal governmental activities. Such fields include education, where universities, tertiary colleges and a lately expanding cohort of private schools and colleges are already, or may easily become, incorporated. Likewise, in healthcare, where hospitals (public and private), clinics, hospices, pathology providers and medical practices are, or may readily become, incorporated. Similarly, with the privatisation and out-sourcing of activities formerly conducted by State governments, departments or statutory authorities, through corporatised bodies now providing services in town planning, security and protective activities, local transport, energy, environmental protection, aged and disability services, land and water conservation, agricultural activities, corrective services, gaming and racing, sport and recreation services, fisheries and many Aboriginal activities. All of the foregoing fields of regulation might potentially be changed, in whole or in part, from their traditional place as subjects of State law and regulation, to federal legal regulation, through the propounded ambit of the corporations power.’
No going back
The WorkChoices Case is arguably the most important case for the content of constitutional power in Australia. Justice Kirby made this forecast: ‘Once a constitutional Rubicon such as this is crossed, there is rarely a going back.’
Why so? After all, surely State and territory governments could try to de-corporatise to evade the federal hold on corporations. This ‘cure’ is simply impractical. It would be dysfunctional, disruptive and very costly. It’s unlikely to be seriously pursued because it also carries the high risk of failure in any new High Court challenge to the federal government’s supreme powers under the constitution of Australia.
Tuesday, November 28, 2006
Monday, November 27, 2006
What should the Federal Government do with its 'Carte Blanche'
"What the High Court has effectively done is given carte blanche to the Federal Government in terms of using corporations power to essentially take over what they like in the states." quote South Australian Premier Mike Rann.
Should the Federal Government use their new found powers to legislate for the decentralisation of all areas of state control? Should responsibility for health, education, planning, transport and police be given by federal legislation to the level of government closest to the people: local government?
The states have done an extremely poor job in all areas. Let's look at their report card on planning.
Planning - C to C Minus. ABC News reported on November 16 2006 that a new report by the Planning Institute of Australia has found most states and territories are under-performing when it comes to planning. The institute has asked its members to rate the state or territory in which they live in terms of planning systems and outcomes.
The national report card focused on 10 key areas, including housing, growth management and infrastructure, but the institute's chief executive officer, Di Jay, says it was public transport that proved to be the greatest disappointment.
"Planners aren't happy with the level of investment that we're seeing in public transport and shifting people away from the car dependent sort of cities that we've been building," she said.
All states and territories were awarded a 'C', with the exception of Tasmania which lagged behind with a 'C minus'.
Local government knows what is needed. Some councils hold public transport forums, all NSW Councils have traffic committees. State governments are just so disconnected from the people, it is not surprising that they also have professional planners off-side.
Should the Federal Government use their new found powers to legislate for the decentralisation of all areas of state control? Should responsibility for health, education, planning, transport and police be given by federal legislation to the level of government closest to the people: local government?
The states have done an extremely poor job in all areas. Let's look at their report card on planning.
Planning - C to C Minus. ABC News reported on November 16 2006 that a new report by the Planning Institute of Australia has found most states and territories are under-performing when it comes to planning. The institute has asked its members to rate the state or territory in which they live in terms of planning systems and outcomes.
The national report card focused on 10 key areas, including housing, growth management and infrastructure, but the institute's chief executive officer, Di Jay, says it was public transport that proved to be the greatest disappointment.
"Planners aren't happy with the level of investment that we're seeing in public transport and shifting people away from the car dependent sort of cities that we've been building," she said.
All states and territories were awarded a 'C', with the exception of Tasmania which lagged behind with a 'C minus'.
Local government knows what is needed. Some councils hold public transport forums, all NSW Councils have traffic committees. State governments are just so disconnected from the people, it is not surprising that they also have professional planners off-side.
Thursday, November 23, 2006
The debate has started
Historic Australian Parliamentary resolution - passed by both Houses of Federal Parliament in 2006, recognising Australian Local Government.
"That the House/Senate:
* recognises that local government is part of the governance of Australia, serving communities through locally elected councils
* values the rich diversity of councils around Australia, reflecting the varied communities they serve.
* acknowledges the role of local government in governance, advocacy, the provision of infrastructure, service delivery, planning, community development and regulation.
* acknowledges the importance of cooperating with and consulting with local government on the priorities of their local communities.
* acknowledges the significant Australian Government funding that is provided to local government to spend on locally determined priorities, such as roads and other local government services.
* commends local government elected officials who give their time to serve their communities." (Carried)
Labor's amendment: (defeated)
That paragraph 1) be omitted and the following paragraph substituted;
· "1) supports a referendum to extend constitutional recognition to local government in recognition of the essential role it plays in the governance of Australia."
The way ahead? - Empowerment through enactment of one national Local Government Act and charter for all Australian councils with a referendum to follow?
The Australian constitution has been extremely difficult to reform since 1901. This may be due to the fact that many Australians can be easily deterred from supporting change when spoilers put doomsday scenarios or play wedge politics. The ‘republic’ referendum was lost this way. In similar fashion, previous attempts to achieve constitutional recognition of local government in 1974 and 1988 have also failed. We cannot afford to fail again.
What then is the best way ahead for local government?
Constitutional recognition of local government remains our cherished goal and Labor’s amendment to the historic parliamentary resolution recognises that fact. All the same, the federal parliament’s resolution by both the House or Representatives and Senate giving recognition to the role of local government is a major stepping stone on the way. It has been a long time coming.
The ALGA news reported the response by Australian Local Government Association president Cr Paul Bell as "a significant day for local government which has officially come of age as a key player in Australian federalism."
"The resolution acknowledges the role local government has in service delivery, its grass-roots connectedness to communities and its place in the governance of this great nation," Cr Bell said.
"We view this resolution as an important stepping stone towards our longer term goal of full constitutional recognition."[1]
The next step forward
As for the next step forward, should we focus on realising the full potential for community empowerment and the prospect of assured financial sustainability of local communities throughout Australia? The best prospect is by way of enacting one national Local Government Act?
The alternative, the status quo, pleading on the altruism of state and federal governments has a very bleak history and an even bleaker long-term outlook.
Is it likely that in achieving a national Local Government Act, we will have in some way obtained de-facto constitutional recognition? That would certainly be established if the proposed federal government legislation was to be upheld by the High Court in a challenge by the states.
After the dust has settled, and the new Act taken force, the final step, formal constitutional recognition of local government will then have its best chance for success at a referendum. The ‘yes case’ would be seeking public approval to formalise a relationship between the federal government and local government in which all Australians would be familiar and comfortable with. The ‘no case’ advocates would be denied their most potent emotion, fear of the unknown.
This next step would be no ‘orgy of centralism,’ the Prime Minister’s expression, since the federal law would be about boosting resources and decision making in regional areas through the local councils. It would be the antithesis of centralism. A national Local Government Act adopted by Federal parliament should set the visionary charter for all Australian councils with a much broader scope than state laws prescribe. That is because the national Local Government Act could have the flexibility to extend local government to services that are currently inadequately performed by the states.
This strategy is not only tremendously appealing but most importantly, thanks to the High Court, it is practical. The proposed legislation requires only the political will on the part of federal politicians. Hugh potential support from local government versus probable vehement opposition from state governments.
Visionary political parties that are in touch with the community should be encouraged to take the issue on board as party policy. The best news is that the proposed federal takeover of responsibility for regulation of Australian local government is achievable within federal parliament’s existing constitutional powers.
There are compelling reasons why federal politicians need to act promptly in the national interest to enact a national Local Government Act.
* Increasing number and complexity of regulatory and compliance responsibilities under state laws need to be streamlined and rationalised through federal legislation.
* The proposed legislation will bring about a significant and on-going dividend in red tape reduction by removing state law and administration.
* Cost Shifting by other spheres of government need stronger action than the Intergovernmental Agreement can possibly deliver with its weak enforcement mechanisms (Cost Shifting Impact: $430 million annually in NSW alone). Legislation is required.
* Increasing community expectations cause expansion of services into various areas such as health, human services, culture and education.
* Federal legislation can include these areas in the local government charter with the view to the eventual transfer to local government from state control.
* Skills shortages, demographic challenges (ageing population, sea and tree changes) can be partially addressed by the redeployment of redundant state government employees.
* Environmental pressures (water, coastal protection) needs federal funding support to local government to make achieve the outcomes sought by local communities.
* Pressures in regional and rural areas are extreme in supplementing or backfilling inadequate State services.
* Infrastructure renewal backlog and gap is huge and growing throughout Australia.
* In NSW the annual infrastructure renewal gap is $500 million.
* Already the present infrastructure renewal backlog in NSW is $6.3 billion.
The public debate has started
2GB host Alan Jones on the 'Today' show last week (Mid November 2006) called for a redefinition of commonwealth, state and local government powers, calling Australian federalism a "mess, and a lopsided mess at that." He said the public "might well opt for a national government and where decentralisation is necessary, better fund local government which has always been closer to the interests and needs of the community."
In response, ALGA President, Cr Bell said: ‘We are ready to take part in a debate on federalism - it can only be of benefit to the Australian community. Wherever I go people say the same thing. They are tired of the blame shifting, buck passing and duplication, they want their problems solved and want more cooperation between the spheres of governments.
A Constitutional Convention set up with a clear purpose, broad support, and well-thought out goals would be a significant development for Australia and one that local government would back all the way.
Local government would also welcome a forum to consider constitutional recognition for local government as part of the discussions around federalism and definition of powers. Local government achieved a milestone with the historic parliamentary resolution on recognition of local government passed by the House of Representatives and the Senate recently. I believe the words of the resolution would be a good starting point.'
[2]
Conclusion
The historic Australian Parliamentary resolution - passed by both Houses of Federal Parliament in 2006 has taken a long overdue step in recognising the contribution that Australian Local Government can make to this great nation. The proposed national Local Government Act is the next step that will give practical effect to the resolution and in so doing, set a watershed in the evolution of governance in Australia.
[1] http://www.alga.asn.au/news/20061020.php
[2] http://www.alga.asn.au/news/20061124.php?id=15f31a5e0c296f8c908a24c16c87f339
"That the House/Senate:
* recognises that local government is part of the governance of Australia, serving communities through locally elected councils
* values the rich diversity of councils around Australia, reflecting the varied communities they serve.
* acknowledges the role of local government in governance, advocacy, the provision of infrastructure, service delivery, planning, community development and regulation.
* acknowledges the importance of cooperating with and consulting with local government on the priorities of their local communities.
* acknowledges the significant Australian Government funding that is provided to local government to spend on locally determined priorities, such as roads and other local government services.
* commends local government elected officials who give their time to serve their communities." (Carried)
Labor's amendment: (defeated)
That paragraph 1) be omitted and the following paragraph substituted;
· "1) supports a referendum to extend constitutional recognition to local government in recognition of the essential role it plays in the governance of Australia."
The way ahead? - Empowerment through enactment of one national Local Government Act and charter for all Australian councils with a referendum to follow?
The Australian constitution has been extremely difficult to reform since 1901. This may be due to the fact that many Australians can be easily deterred from supporting change when spoilers put doomsday scenarios or play wedge politics. The ‘republic’ referendum was lost this way. In similar fashion, previous attempts to achieve constitutional recognition of local government in 1974 and 1988 have also failed. We cannot afford to fail again.
What then is the best way ahead for local government?
Constitutional recognition of local government remains our cherished goal and Labor’s amendment to the historic parliamentary resolution recognises that fact. All the same, the federal parliament’s resolution by both the House or Representatives and Senate giving recognition to the role of local government is a major stepping stone on the way. It has been a long time coming.
The ALGA news reported the response by Australian Local Government Association president Cr Paul Bell as "a significant day for local government which has officially come of age as a key player in Australian federalism."
"The resolution acknowledges the role local government has in service delivery, its grass-roots connectedness to communities and its place in the governance of this great nation," Cr Bell said.
"We view this resolution as an important stepping stone towards our longer term goal of full constitutional recognition."[1]
The next step forward
As for the next step forward, should we focus on realising the full potential for community empowerment and the prospect of assured financial sustainability of local communities throughout Australia? The best prospect is by way of enacting one national Local Government Act?
The alternative, the status quo, pleading on the altruism of state and federal governments has a very bleak history and an even bleaker long-term outlook.
Is it likely that in achieving a national Local Government Act, we will have in some way obtained de-facto constitutional recognition? That would certainly be established if the proposed federal government legislation was to be upheld by the High Court in a challenge by the states.
After the dust has settled, and the new Act taken force, the final step, formal constitutional recognition of local government will then have its best chance for success at a referendum. The ‘yes case’ would be seeking public approval to formalise a relationship between the federal government and local government in which all Australians would be familiar and comfortable with. The ‘no case’ advocates would be denied their most potent emotion, fear of the unknown.
This next step would be no ‘orgy of centralism,’ the Prime Minister’s expression, since the federal law would be about boosting resources and decision making in regional areas through the local councils. It would be the antithesis of centralism. A national Local Government Act adopted by Federal parliament should set the visionary charter for all Australian councils with a much broader scope than state laws prescribe. That is because the national Local Government Act could have the flexibility to extend local government to services that are currently inadequately performed by the states.
This strategy is not only tremendously appealing but most importantly, thanks to the High Court, it is practical. The proposed legislation requires only the political will on the part of federal politicians. Hugh potential support from local government versus probable vehement opposition from state governments.
Visionary political parties that are in touch with the community should be encouraged to take the issue on board as party policy. The best news is that the proposed federal takeover of responsibility for regulation of Australian local government is achievable within federal parliament’s existing constitutional powers.
There are compelling reasons why federal politicians need to act promptly in the national interest to enact a national Local Government Act.
* Increasing number and complexity of regulatory and compliance responsibilities under state laws need to be streamlined and rationalised through federal legislation.
* The proposed legislation will bring about a significant and on-going dividend in red tape reduction by removing state law and administration.
* Cost Shifting by other spheres of government need stronger action than the Intergovernmental Agreement can possibly deliver with its weak enforcement mechanisms (Cost Shifting Impact: $430 million annually in NSW alone). Legislation is required.
* Increasing community expectations cause expansion of services into various areas such as health, human services, culture and education.
* Federal legislation can include these areas in the local government charter with the view to the eventual transfer to local government from state control.
* Skills shortages, demographic challenges (ageing population, sea and tree changes) can be partially addressed by the redeployment of redundant state government employees.
* Environmental pressures (water, coastal protection) needs federal funding support to local government to make achieve the outcomes sought by local communities.
* Pressures in regional and rural areas are extreme in supplementing or backfilling inadequate State services.
* Infrastructure renewal backlog and gap is huge and growing throughout Australia.
* In NSW the annual infrastructure renewal gap is $500 million.
* Already the present infrastructure renewal backlog in NSW is $6.3 billion.
The public debate has started
2GB host Alan Jones on the 'Today' show last week (Mid November 2006) called for a redefinition of commonwealth, state and local government powers, calling Australian federalism a "mess, and a lopsided mess at that." He said the public "might well opt for a national government and where decentralisation is necessary, better fund local government which has always been closer to the interests and needs of the community."
In response, ALGA President, Cr Bell said: ‘We are ready to take part in a debate on federalism - it can only be of benefit to the Australian community. Wherever I go people say the same thing. They are tired of the blame shifting, buck passing and duplication, they want their problems solved and want more cooperation between the spheres of governments.
A Constitutional Convention set up with a clear purpose, broad support, and well-thought out goals would be a significant development for Australia and one that local government would back all the way.
Local government would also welcome a forum to consider constitutional recognition for local government as part of the discussions around federalism and definition of powers. Local government achieved a milestone with the historic parliamentary resolution on recognition of local government passed by the House of Representatives and the Senate recently. I believe the words of the resolution would be a good starting point.'
[2]
Conclusion
The historic Australian Parliamentary resolution - passed by both Houses of Federal Parliament in 2006 has taken a long overdue step in recognising the contribution that Australian Local Government can make to this great nation. The proposed national Local Government Act is the next step that will give practical effect to the resolution and in so doing, set a watershed in the evolution of governance in Australia.
[1] http://www.alga.asn.au/news/20061020.php
[2] http://www.alga.asn.au/news/20061124.php?id=15f31a5e0c296f8c908a24c16c87f339
Wednesday, November 22, 2006
Federal Governments Future Use of the Corporations Power
History has shown that governments given powers, will eventually exercise them
How will history record the use by the Federal Government of the Corporations Power? How extensive is that power?
The Prime Minister and his treasurer may not want to create a spectre of being power-hungry, and are playing down the implications of the historic High Court decision on WorkChoices law.
Associate Professor in Labour and Constitutional Law at Griffith University, Graeme Orr has stated on the ABC PM program[1] that it's unusual to find a power that doesn't get used eventually, and the Government will presumably be taking policies, or if it's re-elected, be considering areas of fresh regulation after the next election.
He said: ‘I think it's just too politically sensitive at the moment for them to be seen to be taking over too much.’
The Federal Government in trying to hose down calls by state premiers for a constitutional convention and continues to reject the possibility of a takeover of state responsibilities.
What is the Corporations Power?
WorkChoices has based for its constitutional validity on the corporations power in Section 51(xx) of the Constitution. Section 51(xx) states:
‘The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to:- (xx.) Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth.’
Constitutional corporations for the purposes of section 51(xx) are defined as:
• trading or financial corporations formed within Australia
• foreign corporations.
Moving towards One national Australian Industrial Relations system
By basing WorkChoices on the corporations power, all commentators agree that the Federal Government has significantly expanded the coverage of the federal industrial system. Around 85% of corporations, including many non-commercial corporations, are understood to come within the definition of ‘trading’ or ‘financial’ corporations. In addition, the federal industrial relations system now also applies to state and local government corporations and their employees.
What exactly is a trading corporation?
The list is endless, according to former Treasury Secretary and co-founder of the Samuel Griffiths Society, John Stone who said on the ABC, PM program: ‘Obviously a trading corporation is a corporation which engages in trade, that is to say, sells or buys goods or services.’ ‘And as long as we're talking about a corporation, this decision now gives the Commonwealth Government the power to in effect intervene in any aspect of a corporation's activities.’
Examples of trading corporations
Trading corporations include:
* In education, private universities are incorporated.
* So are many private schools
* Our public universities are corporations because they sell educational services
* Childcare centres
* In health, there are many private health clinics that are incorporated.
* Previously state-owned gas and electricity companies are now incorporated.
* Water is traded through state owned corporations
* The list is almost endless, because, the decision of the High Court concerns the relationship between a corporation and its employees.’
Calls for a Constitutional Convention Dismissed by the PM
South Australia's Premier, Mike Rann, has called for a constitutional convention in 2008 on the future of the federation.
The Queensland Premier, Peter Beattie, has also called for a constitutional convention and referendum in response to the High Court's decision in favour of the Commonwealth workplace relations laws.
Prime Minister John Howard said the ruling had not given the commonwealth any extra powers, but had just reaffirmed the powers it already had.
"I know the states are calling for constitutional conventions and so forth - they lost the appeal. It was always our advice that this legislation was constitutional," he told Macquarie Radio. "This does not mean that I am going to embark upon some orgy of centralism. I have no desire to do that."
Mr Howard rejected calls for a referendum, saying there was no need. "We didn't have a referendum because we didn't need one. We enacted a law which we believe was constitutional and the High Court agreed with us[2]."
The Way Forward?
The way is now wide open for a future federal government using the corporations power to takeover of the regulation of electricity companies, childcare centres, universities, private schools and local government. Given the state governments’ poor management of all these areas, that might not be a bad thing, even if it happens by stealth.
[1] http://www.abc.net.au/pm/content/2006/s1789499.htm
[2] http://www.alga.asn.au/news/20061117.php?id=fc4cdd324f967827a081777111ce0263
How will history record the use by the Federal Government of the Corporations Power? How extensive is that power?
The Prime Minister and his treasurer may not want to create a spectre of being power-hungry, and are playing down the implications of the historic High Court decision on WorkChoices law.
Associate Professor in Labour and Constitutional Law at Griffith University, Graeme Orr has stated on the ABC PM program[1] that it's unusual to find a power that doesn't get used eventually, and the Government will presumably be taking policies, or if it's re-elected, be considering areas of fresh regulation after the next election.
He said: ‘I think it's just too politically sensitive at the moment for them to be seen to be taking over too much.’
The Federal Government in trying to hose down calls by state premiers for a constitutional convention and continues to reject the possibility of a takeover of state responsibilities.
What is the Corporations Power?
WorkChoices has based for its constitutional validity on the corporations power in Section 51(xx) of the Constitution. Section 51(xx) states:
‘The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to:- (xx.) Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth.’
Constitutional corporations for the purposes of section 51(xx) are defined as:
• trading or financial corporations formed within Australia
• foreign corporations.
Moving towards One national Australian Industrial Relations system
By basing WorkChoices on the corporations power, all commentators agree that the Federal Government has significantly expanded the coverage of the federal industrial system. Around 85% of corporations, including many non-commercial corporations, are understood to come within the definition of ‘trading’ or ‘financial’ corporations. In addition, the federal industrial relations system now also applies to state and local government corporations and their employees.
What exactly is a trading corporation?
The list is endless, according to former Treasury Secretary and co-founder of the Samuel Griffiths Society, John Stone who said on the ABC, PM program: ‘Obviously a trading corporation is a corporation which engages in trade, that is to say, sells or buys goods or services.’ ‘And as long as we're talking about a corporation, this decision now gives the Commonwealth Government the power to in effect intervene in any aspect of a corporation's activities.’
Examples of trading corporations
Trading corporations include:
* In education, private universities are incorporated.
* So are many private schools
* Our public universities are corporations because they sell educational services
* Childcare centres
* In health, there are many private health clinics that are incorporated.
* Previously state-owned gas and electricity companies are now incorporated.
* Water is traded through state owned corporations
* The list is almost endless, because, the decision of the High Court concerns the relationship between a corporation and its employees.’
Calls for a Constitutional Convention Dismissed by the PM
South Australia's Premier, Mike Rann, has called for a constitutional convention in 2008 on the future of the federation.
The Queensland Premier, Peter Beattie, has also called for a constitutional convention and referendum in response to the High Court's decision in favour of the Commonwealth workplace relations laws.
Prime Minister John Howard said the ruling had not given the commonwealth any extra powers, but had just reaffirmed the powers it already had.
"I know the states are calling for constitutional conventions and so forth - they lost the appeal. It was always our advice that this legislation was constitutional," he told Macquarie Radio. "This does not mean that I am going to embark upon some orgy of centralism. I have no desire to do that."
Mr Howard rejected calls for a referendum, saying there was no need. "We didn't have a referendum because we didn't need one. We enacted a law which we believe was constitutional and the High Court agreed with us[2]."
The Way Forward?
The way is now wide open for a future federal government using the corporations power to takeover of the regulation of electricity companies, childcare centres, universities, private schools and local government. Given the state governments’ poor management of all these areas, that might not be a bad thing, even if it happens by stealth.
[1] http://www.abc.net.au/pm/content/2006/s1789499.htm
[2] http://www.alga.asn.au/news/20061117.php?id=fc4cdd324f967827a081777111ce0263
Monday, November 20, 2006
Cost shifting to Local Government - has it happened since April 2006?
The April 2006 Inter Governmental Agreement (IGA) on Local Government was the outcome of a process which began with the November 2003 report of the House of Representatives Standing Committee on Economics, Finance and Public Administration - Rates and Taxes: A Fair Share for Local Government (the Hawker Report).
The aim of the IGA is to address cost shifting by obtaining in principle agreement from governments that when a responsibility is directed to local government, local government is consulted and the financial and other impacts on local government are taken into account.
Formal compliance with the formal agreement will be examined in a review in 5 years. In the mean-time, can you provide feed-back where you think the agreement http://www.lgpmcouncil.gov.au/publications/doc/Booklet_with_parties_signatures.pdf is, or is not, being honoured.
The aim of the IGA is to address cost shifting by obtaining in principle agreement from governments that when a responsibility is directed to local government, local government is consulted and the financial and other impacts on local government are taken into account.
Formal compliance with the formal agreement will be examined in a review in 5 years. In the mean-time, can you provide feed-back where you think the agreement http://www.lgpmcouncil.gov.au/publications/doc/Booklet_with_parties_signatures.pdf is, or is not, being honoured.
Feasibility of one Australian Local Government Act for all councils
In view of the recent High Court decision that gave a very broad interpration of the federal government's corporations power, should the Australian Local Government Association explore the feasibility of bringing local government throughout Australia under one national Australian Local Government Act?
Time for local government to operate under 1 law
Introduction
The NSW Department of Local Government have recently invited submissions from the public on the position paper ‘New Direction for Local Government[1]’. Submissions are due by 9 March 2007. The Department’s position paper gives a brief history of forced structural reforms into NSW local government, yet the paper did not mention the need for the state government to reform itself. The paper instead discusses a range of areas for improvement by councils including the following: Peer reviews of councils, Strategic planning assistance for councils, Red tape review and Clarification of roles.
This blog does not offer comment on these or other topics covered in the paper. In my view, the position paper omits the most promising new direction for local government. This is the direction already taken by local government in New Zealand.
It is a direction that offers the best opportunity to achieve long term financial sustainability by local government throughout Australia. This blog outlines a proposed new direction that will be a quantum leap for local government in Australia.
Recent interpretation of federal powers under the Australian Constitution
My starting point is the law. In New South Wales, Australia, we are subject to the NSW Local Government Act 1993. A recent High Court decision[2] on Workchoices laws went against the six state governments and upheld the Australian Government’s legislative use of the ‘corporations’ power under the constitution. Leaving aside the contentious debate over the IR laws themselves, the decision is highly significant for local government in Australia in other ways.
Legal experts such as Professor Ron McCallum, Dean of Law at Sydney University has indicated that the corporations power could be utilised by a future federal parliament to take control of many areas traditionally controlled by state governments. Prof. McCallum[3] told the ABC:
‘the High Court has left the door open. They've declared the WorkChoices laws to be valid. They've given a wide view to the corporations power. This would leave it potentially open to the Federal Parliament to control areas of health where corporations operate. Query, could control some aspects of local government. I think we've seen, over the last 30 years, from the Hawke, Keating, Howard governments, federal powers increasing by a lot of favourable High Court decisions. You'll remember the Tasmanian dams case a quarter of a century ago. I think the States are looking more and more like municipal governments than state governments.’
The High Court decision opens the way for a new 'New Federalism', going far beyond Industrial Relations and with a huge impact on the overall power of the states[4]. Professor George Williams of the University of NSW said: "They [the High Court]have constructed Commonwealth power with few or any qualifications[5]”
Constitutional lawyers are still picking over the judgment, but they all agree that in many fields the Commonwealth can now basically do what it likes. It is now a real possibility that responsibility for local government could, under suitable legislation, come under federal law, since most Councils are considered to be ‘corporations’ under the Australian constitution. The Australian Constitution has, through judicial interpretation, indeed become the evolving document but probably more so than envisioned by its founders in 1901.
The direction forward
This blog recommends that the New South Wales Department of Local Government be advised by interested members of the public, that the way forward to a more financially sustainable future would be for state governments to cede local government powers to the federal government.
Additionally, federal and state members of parliament should be asked to support either state or federal legislation that would facilitate the transfer of local government laws including finance to national legislation.
The submission outlined above is consistent with the successful motion moved by Blacktown City Council to the 2003 National General Assembly of Local Government relating to the perceived benefit of a rationalisation of the current three levels of government. The successful motion has become a policy position of the ALGA and it is suggested that this position should be put by Council to both the DLG and LGA:
‘That the federal government be requested to commission the Productivity Commission to conduct a public inquiry on the anticipated productivity savings from vertical rationalisation of the current three-tier system of government.’
Sustainable funding for councils is critical. Local governments from all states have increasingly been seeking through their Associations, direct federal funding. The recent High Court decision provides an incentive to more vigorously pursue this approach to its logical conclusion.
Justification
The justification for a structural change to the framework for local government in Australia is compelling:
* The unsustainably high cost of the "three tier" system of government in Australia needs to be promptly addressed if Australia is to remain globally competitive in the next few decades.
* There is a pressing need to free up resources that are inefficiently replicated by state governments to more economical ends that advance better outcomes for individuals, communities, groups, the environment, the economy, industry and businesses.
* The NSW Minister for Local Government has admitted that his department has very limited funds available to give local government to meet serious infrastructure funding shortfalls. The position paper provides no significant practical solution to the funding crisis. Regional networking and clustering will help at the margin, but we need far more than that proposal can deliver.
* The financial predicament of local government is consistently exacerbated by the requirement for councils to be the revenue raiser for state run entities such as fire services through such onerous means as levy imposts on councils.
* The cost savings of streamlining government in Australia to two-tiers is likely to be in the order of $20 to $30 billion per annum according to postgraduate research conducted at the University of Canberra. The Productivity Commission should be asked to model the national cost savings achievable through vertical rationalisation of Australia’s system of government.
* The diversity of our country, and the desire and ability of people and communities – in cities and in each viable local region – to deal with their own local issues without excessive interference from state Ministers for Local Government or Ministers for Planning would be a most welcome and refreshing change.
* The desire of Australians to be rid of burdensome and inappropriate differences, between states and territories and sometimes between urban and rural areas, in laws, regulations and access to services, including such essentials as medical treatment, water, energy, communications and transport can now be addressed in light of the recent High Court decision[6].
* Business and community groups have drawn attention to the need for uniform national laws covering local government to replace the current legislative pot pori from six state and two territory governments.
The driver for a new direction to a national legal framework for local government
The biggest driver for reform is the billions of dollars in financial savings that can be achieved through eliminating the heavy overhead costs associated with state government intermediaries.
Conclusion
A national system of local government would bring long overdue legal and financial consistency to the industry. Local government in Australia would be more understandable to national and international clients. With the transfer of power, Australian local government would be in a position to be structured to meet national standards of democratic governance, accountability as promoted by the ALGA and LGMA in consultation with regional associations.
National benchmarks, as foreshadowed in a motion to the 2006 National General Assembly of Local Government could help to ensure that local government is seen to be just, equitable, affordable, efficient, stable yet flexible, and socially, environmentally and economically sustainable; functionally effective in areas such as the environment, health and education; and centralised and decentralised in an appropriate balance.
The federal government would be strengthened under the proposed framework to be more responsive to the opportunities and needs of our country as a whole, and to our global circumstances into this new millienium. In place of existing state governments, local/regional structures such as WSROC and the LGA could play their role, being close to and responsive to the opportunities and needs of people and communities.
The NSW DLG Position Paper states that local government in NSW is at a crucial point in its history. It correctly observes that communities are rapidly changing and as the heart of communities, local councils must continue to evolve. The department’s position paper sets out a context for ongoing reform by the local government sector in the context of the NSW state government’s supervisory role.
That supervisory role has been the problem. It is vital for interested members of the community to set out an alternative new direction of connectedness and innovation within a new, broader national framework as outlined in this blog.
Links
[1]NSW DLG Position Paper http://www.dlg.nsw.gov.au/dlg/dlghome/documents/Information/Position%20Paper.pdf
[2] New South Wales v Commonwealth of Australia; Western Australia v Commonwealth of Australia [2006] HCA 52 (14 November 2006) http://www.austlii.edu.au/au/cases/cth/HCA/2006/52.html
[3] High Court decision a comprehensive win for Commonwealth: law experts http://www.abc.net.au/worldtoday/content/2006/s1788172.htm
[4] High Court decision paves way for greater federal control http://www.abc.net.au/pm/content/2006/s1788644.htm
[5] SMH The Appeal was lost 86 years ago. http://www.smh.com.au/news/national/appeal-was-lost-86-years-ago--constitution-expert/2006/11/14/1163266550349.html
[6] The beyond Federation Charter http://www.beyondfederation.org.au/charter.html
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